Who’s Who Legal recognised the firm’s strengths and named Webber Wentzel as South African Law Firm of the Year, 2011 and, according to Legal 500, Webber Wentzel is rightly regarded as part of South Africa’s “Magic Circle”.

At Webber Wentzel, a significant strength lies in the firm’s natural resources, energy and infrastructure practices. It has the largest team based on the continent. This dedicated team provides clients with focused advice relevant to the commercial environment in which mining, energy and natural resource companies operate.

The firm has become part of ALN; an established group of Africa’s foremost law firms, the largest and only group of its kind on the continent. ALN’s coverage extends to 12 African countries and has a total headcount of more than 580 lawyers.

ALN strengthens Webber Wentzel’s footprint in Africa and creates a pan-African platform for the firm when working on cross-border deals

McKean says: “At Webber Wentzel, we want to encourage international investment into Africa. A great deal of the Chinese investments that we are seeing flow into Africa are entering the continent through the gateway of South Africa. We are raising our profile in China to ensure investors are aware of Webber Wentzel’s track record of helping businesses succeed in Africa.”

Webber Wentzel also has a dedicated tax team offering combined legal and tax-structuring advice for transactions all over sub-Saharan Africa, and advice on African holding company structures through various offshore jurisdictions.

Rand Merchant Bank’s key focus in Africa is the resources sector, in which it has been involved since 1977, along with infrastructure development and the agriculture and telecommunications sectors. “We have experience in all commodities with our main thrust in terms of investment banking offerings being project finance solutions,” says head of resource financing Henk Deist.

Rand Merchant Bank has done deals in more than 30 African countries in the past 15 years, most of which were in resources related businesses. Some of the larger resources transactions include: advising diamond mining company De Beers on the disposal of the Finsch diamond mine in Kimberley, South Africa; financial adviser, main underwriter and sponsor of the initial public offering and listing of Royal Bafokeng Platinum on the JSE; and acting as co-funder and lender for the expansion of the Morupule Colliery in Botswana; and Paladin Energy’s uranium operations in Namibia. Some other deals in which it has been involved are joint mandated lead arranger for a project finance transaction for Anvil Mining in the Democratic Republic of Congo, lead arranger and underwriter for Avmin/Chambishi in Zambia, and lender to BP in Angola.

A natural extension to Rand Merchant Bank’s mining business is upstream and midstream oil and gas project finance as Africa’s contribution to global oil production increases each year. Rand Merchant Bank participated in the financing of the Jubilee oilfield in Ghana for Kosmos Energy and Tullow Oil and, most recently, in a pre-production financing facility for the Nigerian National Petroleum Corporation and ExxonMobil Nigeria.

Some infrastructure related deals concluded include: financing and advising a public-private partnership on the Lekki-Epe Expressway, a toll road in Nigeria; and structuring and financing the Adones undersea cable in Angola.

Along with its strategic focus on Africa, Rand Merchant Bank is developing links with China as Chinese, and other Asian investors, show a growing interest in Africa’s resources, and sectors associated with mining, such as infrastructure. In 2009, FirstRand entered into a strategic co operation agreement with the China Construction Bank to focus on joint financing and advisory services for Chinese and African companies. Both companies have provided dedicated teams to fulfil the mandate. Rand Merchant Bank’s parent company FirstRand has operated a representative office in Shanghai since 2007 to help with trade between Africa and Asia.

“With our long track record, experience and client relationships, we believe we can provide Chinese companies with the necessary knowledge and expertise needed on the African continent,” says Mark Treagus, head of international operations.

One of the more recent South Africa/ China deals for which Rand Merchant Bank provided advice, was the acquisition of South African resources company Gold One International by a consortium of Chinese investors lead by Baiyin Nonferrous Metal Group.

Rand Merchant Bank continues to grow its Chinese/African business while increasing its visibility in Africa, and aims to be financier of choice across the African continent.

As the global crisis continues to cause concern, Africa is positioning itself as the continent in which the international investment community can do business. South Africa has a wealth of resources and the required skills to successfully develop its mining sector. Siyanda Resources is positioning itself as an attractive investment opportunity and the company continues to build on its reputation for developing lasting partnerships.

As one of the first two black executives to receive a mine manager’s certificate in South Africa’s gold industry in 1992, Mr. Lindani Mthwa, Executive Chairman of Siyanda Resources understands that mining requires long-term commitment:

‘At Siyanda we understand the mining industry and are fully committed to the development of the company. We are in the process of attracting funds in order to develop our assets. With increased competition as more companies enter the resource sector, mining firms must be more focused and driven – at Siyanda, we are here for the long term’.

Kangwane and Eloff mining coalfields are Siyanda’s current coal projects. Through its employees’ high-level engineering skills and experience in the mining sector, the company has the capacity to manage projects and develop strong partnerships with companies such as De Beers, Total and BHP.

Siyanda Chrome Investments, a subsidiary of Siyanda Resources, has a shareholding in Masa Chrome Company, a joint venture with Anglo Platinum which produces chrome for the export market.

‘With the right partner, now is the time to invest in South Africa,’ says Mthwa. ‘We encourage the rest of the world to look at the economic opportunities this country offers and work with us to move South Africa forward. It is our time, and the youth of South Africa understand that we need to develop the country for the benefit of future generations’.

With a flexible approach to doing business, the ability to understand South African legislative dynamics and a track record of successfully meeting production targets, Siyanda Resources’ future looks bright.

Mthwa: ‘As a company, we will continually operate in a responsible, yet highly ambitious manner, to become a globally competitive resources company. We are focused on consistently increasing shareholder value through well researched investments, our ability to effectively operate strategic assets and by developing our network of reliable partners’.

This year China Inc. is likely to become the largest foreign investors in the South Africa economy. Chinese investors have so far announced close to US$3bn investment into our economy over the course of 2011 alone. Whilst western economies battle with sluggish growth, sovereign debt crises and government inertia, China Inc. is becoming an increasingly assertive commercial actor in South Africa. Beijing views South Africa as its foremost strategic partner in Africa as well as a major player in multilateral global politics.

I wrote over a year ago that China and South Africa’s “strategic partnership” was underperforming on the commercial front. I said that South Africa needs to “do more to leverage its political relations with Beijing for greater investment return”. This is no longer the case. Politics has enabled China’s strong pipeline of investment into South Africa. Since August last year, there have been four high level political engagements between Pretoria and Beijing – President Zuma’s state visit (August 2010), Chinese Vice President Xi Jinping visit to South Africa (November 2010), the BRICS summit which Zuma attended in Sanya, China (March 2011) and most recently Deputy President Kglame Motlanthe’s trip to Shanghai and Beijing last week. Pretoria’s political efforts toward building close ties with Beijing – far more than under former president Thabo Mbeki – is now paying commercial dividends. Most of the investment is in mining resources and manufacturing.

In May this year, the China-Africa Development Fund, state-owned mining firm Jinchuan and China Development Bank providing debt finance invested US$877m into the listed junior platinum firm Wesizwe Platinum. The investment is creating 3,500 permanent jobs in Northwest Province. Other announced investments are into JSE-listed mining firms Metorex (US$1.335bn), Gold One (US$158.7m), FAW into an automotive manufacturing plant in the Eastern Cape (US$100m), and another automotive factory in Harrismith to the value of US$1bn. These projects reflect the confidence that Chinese business has in South Africa and the continent as an emerging market.

Competitive pressures

The pace of China’s industrial rise and integration into the global economy through trade continues to force other economies to adapt. Its rapidity is exposing competitive weaknesses in industrial sectors in our economy at a speed that has taken government by surprise. One could argue that government’s recent Industrial Policy Action Plan (IPAP) is a strategic response to competition from China – our single largest trading partner.

South Africa – both public and private sectors – needs to get a handle on China’s drivers of competitiveness in order to better compete. Protectionism and insular policies designed to discriminate against Chinese competition is not sustainable and only satisfies a domestic political constituency. Ultimately however, the structural issues of improving competitiveness need to be addressed.

 

Aligning our interests in Africa

As China expands its presence in Africa, the interests of China and South Africa will increasingly intersect. For South African business, China’s move into the continent poses a major strategic consideration. As “China Inc.” builds its presence in Africa, its interests will increasingly intersect with those of “SA Inc.” in the region. Chinese firms have rapidly established themselves in markets which South African firms have been slow to expand into – Angola for instance. Perhaps the question of the previous Government in Pretoria is “who lost Angola to China”?

Do we seek to compete or collaborate with Chinese business in the sub Saharan region which has – at least Anglophone Africa – become South Africa’s commercial sphere of interest? To better engage China’s “state capitalist” approach, it is imperative that we reduce the disconnect between the state and the private sector in South Africa in order to enhance our ability to project a more coordinated and focused economic diplomacy in Africa – a region in which China is now the most influential trader, provider of capital and commercial actor. South Africa Inc. too needs to make a conscious decision to strategically position itself and couple our economy with the Chinese long term growth train.